Canadian tobacco class actions head to trial

Big things are afoot north of the border, and they have nothing to do with mythical, hirsute creatures. Two class action lawsuits that consumers filed against the tobacco industry in 1998, which were combined and certified to proceed in 2005, are being hailed as the biggest lawsuit in Canadian history (and the first class action against the tobacco industry) to ever get to trial.

After nearly 14 years and more than 50 pretrial motions, the two suits are being tried together with common evidence before Justice Brian Riordan in Québec Superior Court. The two classes are composed of Québec residents dealing with divergent issues. The first class, represented by lead plaintiffs Conseil québécois sur le tabac et la santé (Québec Counsel on Tobacco and Health) and Jean-Yves Blais, comprises smokers who have suffered from cancer of the lung, larynx or throat, or emphysema. A purported class of more than 90,000 people seeks $9.45 billion in damages. Lead plaintiff Cécilia Létourneau represents the second class, which centers on addiction. The purported class in this lawsuit is estimated to include about 1.78 million Québec smokers seeking $17.8 billion in damages.

In the plaintiffs’ crosshairs are the three largest tobacco companies in Canada—Imperial Tobacco Canada Ltd., Rothmans, Benson & Hedges Inc. and JTI-Macdonald Corp. The Canadian federal government also is named as a defendant in warranty, which is similar to a third-party defendant. The tobacco companies have argued that should they lose, they will seek to recover damages from the government. To the government’s dismay, in September 2011, the court struck down an agreement that would have released it from paying damages, as well as its February motion to be removed as a defendant in warranty.

Gaining Certification

Considering this is just the fourth class action against the tobacco industry to ever get to trial in the world, gaining certification is paramount. Historically, the biggest problem for plaintiffs in both the U.S. and Canada has been winning class certification. In fact, only one other class action, Knight v. Imperial Tobacco Canada Limited, has been certified in Canada.

The Québec cases were able to proceed largely because the threshold for certification is easier in Québec than in most other parts of North America. But there still are a number of individual issues that the court must consider.

As an example, she says that in the Létourneau case, the plaintiff had already brought an addiction claim against Imperial in what would be the U.S. equivalent of a small claims court that went to trial and was dismissed. The lower Québec court ruled on the basis that Létourneau had quit smoking for a period of time, and that she was completely aware of the risks involved, including the difficulty of quitting.

“Now, here she is as the representative of about 1.7 million people when her claim has already been dismissed, and they’ve brought no other claimant forward to assert any other claims against the companies,” Glendinning says.

The Canadian Cancer Society sees things differently. “It will be difficult for the industry to establish that they’ve done nothing wrong,” says Rob Cunningham, senior policy analyst with the organization, noting that the tobacco companies’ deep pockets and lobbying have enabled them to drag these suits out for so long and quash lawsuits from individual plaintiffs.

Provincial Predicaments

In addition to the Québec class actions, there also currently are Medicare cost recovery class action lawsuits on behalf of individuals in four provinces—British Columbia, Ontario, New Brunswick, and Newfoundland and Labrador. The remaining six provinces and Nunavut, a Canadian territory, also have announced their intention to file similar suits. None of these cases have been certified yet, and the provinces are still working through procedural issues.

“I still believe the provinces are going to have great difficulty trying to actually establish what they need to in order to prevail under their legislation,” Glendinning says. “But it’s still early. Whether the Québec case has an impact on the Medicaid cases depends on the outcome.”

Douglas Lennox, a lawyer at Klein Lyons, is a bit more optimistic about the precedential value of the Québec suit, noting that it will be the first time many defense witnesses will be examined under oath and that many new documents will come to light, but concedes Glendinning’s point.

“The Québec case is certainly important, but the provincial cases are going to be decided under their own legislation,” he says.

The allegations are similar with regard to the tobacco companies’ behavior, and the provincial governments can certainly use the evidence that comes out in terms of the documents. The four provinces that have lawsuits, however, have passed their own legislation enabling the lawsuit, such as British Columbia’s Tobacco Damages and Health Care Costs Recovery Act. And unlike the Québec class actions, the provincial cases have named the foreign parent companies as defendants.

Similarities and Differences

There are a number of parallels between the Québec case and tobacco cases in the U.S. Glendinning says the nature of the claims are similar in that they’re product liability claims, failure-to-warn claims and product defect claims, but in this case, they’re under Québec’s civil law jurisdiction.

“The best comparison would be the class actions in Florida,” Lennox says, referring to Engle v. Liggett Group, Inc. After a series of appeals and decertification, Engle led to dozens of smaller cases that have been tried to verdict relying on a Florida Supreme Court decision in which the court ruled that smokers just have to prove that they got lung cancer or another smoking-related disease.

Lennox adds that the class action litigation environment in Canada is very different from the U.S. In Canada, damages for pain and suffering are capped just above $100,000, so people can’t afford to individually sue large companies.

“The only way that mass torts get litigated in Canada is as a class action,” he explains, “so that’s why our courts are more permissive in certifying class actions than in the U.S. Our rules were designed to be more permissive, but concerns about access to justice are much starker in Canada. An American judge who denies certification for a mass tort knows that injured American plaintiffs will still have their day in court. A denial of certification in Canada is the end of any chance that allegations of wrongdoing will ever be seen by a Canadian court.”